According to Reuters news on July 1, two people familiar with the matter revealed that Japan’s SoftBank Group has restarted negotiations with a group of bank consortiums to seek a US$10 billion margin loan as collateral for its shares in OpenAI. Previous negotiations had been blocked by banks’ concerns about the difficulty of valuing private companies. In order to ease the concerns of lenders, the Japanese technology investment giant proposed that SoftBank itself provide a repayment guarantee. Once the value of the OpenAI shares used as collateral drops, the bank can recover from SoftBank itself, and is no longer limited to this part of the equity assets.
Institutions participating in the loan consortium are expected to include Goldman Sachs Group Inc., JPMorgan Chase & Co. and Japan's Mizuho Financial Group, people familiar with the matter said. SoftBank and OpenAI did not respond to requests for comment, while Goldman Sachs, JPMorgan Chase and Mizuho declined to comment. Sources pointed out that the financing is part of SoftBank’s efforts to support its ambitious artificial intelligence investment strategy. This type of margin loan is essentially similar to a revolving line of credit.
In the early stages of negotiations, SoftBank had hoped that the loan would be fully backed by its shares in the "ChatGPT" developer, but the bank proposed that this arrangement meant that once the value of the mortgage equity was damaged, the bank had no recourse to SoftBank's other assets. Under such a structure, SoftBank is not legally obligated to repay the debt if the collateral value is insufficient. The impasse highlights banks' increasing caution in handling loans backed by shares in unlisted companies, where valuations are harder to judge and shares can be sold on the market as quickly as publicly traded stocks.
Reuters is currently unable to confirm whether banks have additional concerns about OpenAI's specific valuation. In the past few years, the valuations of large artificial intelligence companies represented by OpenAI and Anthropic have rapidly expanded. The background is the fierce competition among global technology giants to compete for dominance in the field of artificial intelligence. Driven by SoftBank founder Masayoshi Son, the Japanese conglomerate has become one of the world's largest supporters of OpenAI, and its strategic goal is to build SoftBank into a core investor in the field of artificial intelligence.
SoftBank has committed more than $60 billion to OpenAI and related artificial intelligence infrastructure projects, including the large-scale data center project "Stargate" announced last year with OpenAI and Oracle, people familiar with the matter said. To support such a huge investment, SoftBank has relied heavily on debt and asset-backed financing in the past few years. In recent months, the company has explored a variety of financing options around its investment portfolio.
Last year, SoftBank sought to raise $5 billion in margin loans backed by its stake in chip design company Arm Holdings. Arm's share price has soared, driven by the artificial intelligence craze, which also makes the collateral for the loan easier to value and be liquidated by the lending bank if necessary. Unlike loans secured by OpenAI equity, Arm is a listed company, its shares are highly liquid, its prices are transparent, and its risks are more controllable for banks.
Previously, according to Bloomberg, SoftBank had tried to raise at least US$10 billion through margin loans collateralized by its holdings of OpenAI equity. Later, due to the hesitation of many lenders, the financing target was once lowered to about US$6 billion. In June this year, OpenAI secretly submitted an initial public offering (IPO) application to U.S. regulators. Once the listing is completed, SoftBank’s shares in OpenAI are expected to become more transparent and operable in terms of valuation and future realization.
SoftBank is also facing a huge maturity pressure: the company must repay a bridge loan of up to US$40 billion before March 2027. This loan was originally used to accelerate its investment layout in OpenAI. SoftBank previously said the borrowing "is likely to be repaid through the use of existing assets and other financing measures."
Since this year, Masayoshi Son has further accelerated SoftBank’s investment pace in the field of artificial intelligence, covering key infrastructure such as data centers, semiconductors and robots, hoping to place SoftBank at the core of the rapid expansion of the global artificial intelligence industry.